Microcredit as a modern concept of providing very small loans to poor borrowers gained worldwide attention with the establishment of the Grameen Bank in 1983. In which country was this pioneering Grameen Bank founded?

Introduction / Context:
Microcredit refers to the practice of giving small loans to low income individuals who typically lack access to traditional banking services. This approach aims to empower poor households, especially women, to start small businesses and improve their livelihoods. The Grameen Bank is one of the earliest and most famous institutions that implemented microcredit on a large scale and became a model for similar programs around the world. This question asks you to identify the country where the Grameen Bank was founded in 1983.

Given Data / Assumptions:

• The year of establishment of the Grameen Bank is 1983.
• The bank is considered a pioneer in microcredit.
• Options are Bangladesh, Afghanistan, Cambodia, and India.
• We need to know in which of these countries the Grameen Bank originated.

Concept / Approach:
Professor Muhammad Yunus, an economist, started the Grameen Bank project in rural areas to provide small loans to poor villagers, particularly women, without demanding traditional collateral. This experiment began in Bangladesh and later grew into a full fledged bank. Muhammad Yunus and the Grameen Bank jointly received the Nobel Peace Prize for their efforts to combat poverty. Therefore, if we associate Grameen Bank and Muhammad Yunus with a particular country, that country is Bangladesh.

Step-by-Step Solution:
Step 1: Recall that the Grameen Bank is closely associated with Professor Muhammad Yunus, who is known as a pioneer of microfinance. Step 2: Recognise that Muhammad Yunus is from Bangladesh and that his early experiments in microcredit were conducted in villages there. Step 3: Connect the year 1983 with the formal establishment of the Grameen Bank as an independent bank in Bangladesh. Step 4: Compare the options and note that while Afghanistan, Cambodia, and India have microfinance institutions, they did not originate the Grameen Bank. Step 5: Conclude that Bangladesh is the correct answer.

Verification / Alternative check:
You can verify this by remembering that the term Grameen itself comes from a word that means rural or village in the Bengali language. Most introductory descriptions of microcredit specifically mention Bangladesh as the birthplace of the Grameen model. The Nobel Peace Prize announcement also highlighted Bangladesh as the country where this approach was tested and expanded, so this strongly supports the answer.

Why Other Options Are Wrong:
Afghanistan and Cambodia have both seen microfinance programs, especially after periods of conflict, but they did not originate the Grameen Bank. India has many microfinance institutions and self help groups inspired by the Grameen approach, but the original bank was not founded there. These countries may have adopted similar models, yet they are not the birthplace of the Grameen Bank itself.

Common Pitfalls:
A common mistake is to think of India because it is a large country with widespread microfinance activity and many poor rural communities. Another pitfall is to confuse microfinance institutions in other developing countries with the original Grameen Bank. Carefully remembering the association between Muhammad Yunus, Bangladesh, and the word Grameen helps avoid these errors.

Final Answer:
The Grameen Bank, regarded as the origin of modern microcredit, was established in Bangladesh.